SARAVANAN PALANIAPPAN,CHENNAI vs. ACIT CENTRAL CIRCLE 2(4), CHENNAI

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ITA 931/CHNY/2024Status: DisposedITAT Chennai26 June 2024AY 2021-22Bench: HON’BLE SHRI MANU KUMAR GIRI (Judicial Member), SHRI S.R. RAGHUNATHA (Accountant Member)3 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the CIT(A)'s order, restoring the appeal to the CIT(A) for adjudication on merits. This was done to grant the assessee an opportunity to be heard and to ensure the detailed reply filed was considered.

What were the facts?

During assessment proceedings following a search, the assessee failed to explain the sources of expenditure, loans, and investments. The Assessing Officer made additions and assessed income at Rs. 81,58,86,115/-. The assessee did not appear before the CIT(A), who confirmed the assessment.

What were the issues?

Whether the principles of natural justice were violated by the CIT(A) by not considering the assessee's reply and not providing an adequate opportunity of hearing.

Which sections of the Income-tax Act were involved?

Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: HON’BLE SHRI MANU KUMAR GIRI, JM & SHRI S.R. RAGHUNATHA

Hearing: 24.06.2024Pronounced: 26.06.2024

O R D E R

PER MANU KUMAR GIRI (Judicial Member ) This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)[CIT(A)] Chennai-19 dated 21.02.2024 for Assessment Year 2021-22.

2.

Assessee is an individual and has filed the return of income. A search was conducted in the case of Kallal group on 11.03.2021. During assessment

1.

- 2 - proceedings assessee failed to explain sources for the expenditure, loan, investment etc.. Therefore, the AO has passed order under section 144 of the Income Tax Act, 1961 (In short ‘Act’) dated 27.09.2022 and made various additions and assessed the income at Rs.81,58,86,115/- which includes unexplained expenditure, unexplained cash, unexplained loan, unexplained investment in gold jewellery and silvers items and income from other sources.

3.

Further, the appellant filed the appeal against the order under section 144 of the Act dated 27.09.2022 before the Ld. CIT(A) wherein the assessee did not appear before the first appeal authority. Accordingly, the assessment was confirmed on merits against which assessee is in further appeal before us.

4.

At the outset, Ld. Counsel for the appellant submitted that Ld. CIT(A) had not followed the principles of natural justice. Ld. Counsel for the appellant further prayed that if an adequate opportunity of hearing is given to appellant, appellant would prosecute its case properly before the Ld. CIT(A). The Ld. Sr. DR pleaded for dismissal of the appeal on the ground that the assessee failed to appear before the ld. first appellate authority.

5.

Though we concur with the submissions of Ld. Sr. DR however, keeping in mind the principle of natural justice we deem it fit to grant another opportunity of hearing to the assessee. We also find that a detailed reply was filed before the ld.CIT(A), however the same was not at all dealt by the ld.CIT(A) on merits. Accordingly, the impugned order is set aside and the - 3 - appeal is restored back to the file of Ld. CIT(A) for adjudication on merits after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case forthwith without any fail, failing which Ld. CIT(A) shall be at liberty to proceed with the disposal of the appeal on merits.

6.

In the result, appeal filed by the assessee is allowed for statistical purpose.

Order pronounced in the open court on 26th day of June, 2024 at Chennai.

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